France torpedoes Japan's Aussie sub bid

Tuesday, April 26, 2016 - 01:32

France has beaten Japan and Germany to win a A$50 billion ($40 billion) deal to build a fleet of 12 new submarines for Australia. As David Pollard reports, it's one of the world's most lucrative defence contracts and the loss is a blow to Japan.

▲ Hide Transcript

▶ View Transcript

France snatching a 40 billion dollar contract from under the noses of Japan and Germany ...
You could call it a stealth deal.
French defence firm DCNS to provide the technology for 12 new submarines - for Australia.
(SOUNDBITE) (English), AUSTRALIAN PRIME MINISTER MALCOLM TURNBULL SAYING:
"These submarines will be the most sophisticated naval vessels being built in the world and they will be built here, in Australia, built in Australia with Australian jobs, Australian steel, Australian expertise."
But a welcome boost too for the French defence industry- if a dent to Japan's.
This decision prompting questions over why its bid failed.
(SOUNDBITE)(Japanese) MINISTER OF DEFENSE, GEN NAKATANI, SAYING:
"We produced extremely high quality submarines ... so we want to keep pursuing the reason behind why the deal didn't go through."
Japan's been keen to develop its own defence export industry - while Australia has been ramping up defence spending,
That seen as a natural fit.
(SOUNDBITE) (English) FXPRO, HEAD OF RESEARCH, SIMON SMITH, SAYING:
"It would have built up that strategic alliance that they want to build up in the region as a sort of counterweight to China, so it would have also been quite strategic, not only economically but also politically in the region."
But the deal also good strategy perhaps for the Australian leader.
With his appeal said to dwindling, voters go the polls in July.
New shipbuilding jobs no doubt a plus for keeping his election hopes afloat.
And perhaps, one reason for this decision coming months earlier than expected.

Reuters is the news and media division of Thomson Reuters. Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Learn more about Thomson Reuters products: